Web Ad Networks Move To Block Unlawful Ads

Google, Microsoft, Yahoo and other online ad companies agree to policies that aim to starve rogue websites of ad revenue.
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In conjunction with the White House and the Internet Advertising Bureau, a group of Internet advertising companies has agreed to abide by a newly published set of best practices designed to deny ad revenue for websites that violate intellectual property laws.

The companies — 24/7 Media, Adtegrity, AOL, Condé Nast, Google, Microsoft, SpotXchange and Yahoo — have committed to maintaining policies that prohibit websites that are primarily focused on selling counterfeit goods or the unlawful distribution of copyrighted material from participating in ad network advertising programs, when such websites lack significant lawful uses.

U.S. intellectual property enforcement coordinator Victoria Espinel said in a blog post that the Obama administration sees the embrace of these guidelines as a positive step that can help reduce online copyright violations and the sale of counterfeit goods, even as she stressed that "such efforts be undertaken in a manner that is consistent with all applicable laws and with the Administration's broader Internet policy principles emphasizing privacy, free speech, fair process and competition."

That's a well-founded concern because private sector cooperation with law enforcement, whether voluntary or compelled, can be controversial or unlawful. For example, the American Civil Liberties Union last month filed a lawsuit alleging that the National Security Agency's collection of phone call data from Verizon violates U.S. law. And in April, a refusal by Icelandic payment processor Valitor to credit funds donated to Wikileaks through DataCell, an Icelandic data hosting service, was found to be unlawful by Iceland's Supreme Court.

[ Do you think news reporters' sources should be better protected? Read DoJ Limits Seizure Of Reporters' Data. ]

Standard guidelines matter because company-specific advertising policies may lead to inconsistent results or competitive advantage. In 2010, Facebook prohibited a political ad that advocated marijuana legalization because the ad used the image of a marijuana leaf. Google at the time suggested the ad probably would have been allowed under its policies, had the ad been submitted to its ad network. Industry-standard guidelines limit ad policies tailored for self-interest rather than community welfare.

In a post on its public policy blog, Google VP of public policy and government relations Susan Molinari pointed out that Google has already deployed tools and policies to fight copyright violations and product counterfeiting online. "[I]n 2012 we disabled ad serving to 46,000 sites for violating our policies on copyright infringing content and shut down more than 82,000 accounts for attempting to advertise counterfeit goods," she said, noting that 99% of these service denials arose from the company's internal detection systems.

Despite such assertions, not everyone agrees that online advertising companies have been doing enough to limit revenue flowing to those engaged in unlawful activities online. In 2011, Google agreed to pay $500 million to settle Federal Trade Commission allegations that from 2003 through 2009 the company sold hundreds of millions of dollars worth of online ads to rogue pharmacies that were violating U.S. law. Still, government officials such as Mississippi attorney general Jim Hood have in recent months criticized Google for not doing enough to curb the sale of unlawful goods. Complying with an industry-standard set of rules may help limit the extent to which companies can be singled out for criticism by government officials.

Google has not been the only company to profit from ads for such products: A 2009 paper by California Western School of Law professor Brian Liang identified Microsoft's MSN and Yahoo, in addition to Google, as companies generating revenue from ads promoting unlawful pharmaceuticals.